Question

BTN 6-3 Harriet Knox, Ralph Patton, and Marcia Diamond work for a family physician, Dr. Gwen Conrad, who is in private practice. Dr. Conrad is knowledgeable about office management practices and has segregated the cash receipt duties as follows. Knox opens the mail and prepares a triplicate list of money received. She sends one copy of the list to Patton, the cashier, who deposits the receipts daily in the bank. Diamond, the recordkeeper, receives a copy of the list and posts payments to patients’ accounts. About once a month the office clerks have an expensive lunch they pay for as follows. First, Patton endorses a patient’s check in Dr. Conrad’s name and cashes it at the bank. Knox then destroys the remittance advice accompanying the check. Finally, Diamond posts payment to the customer’s account as a miscellaneous credit. The three justify their actions by their relatively low pay and knowledge that Dr. Conrad will likely never miss the money.

Required

1. Who is the best person in Dr. Conrad’s office to reconcile the bank statement?

Short answer

Answer

In a small company office, the business owner must become engaged with control and oversight. In this clinical office, it would significantly improve the internal control environment if Dr Conrad reconciled the bank statements.

Step-by-step solution

Step-by-Step SolutionStep 1: Introduction to topic-

Accounting ethics: Accounting ethics means following the guidelines set by the administering bodies that every individual or entity related to accounting works must follow to prevent their financial information from being misused.

Recommendation-

The best individual in Dr Conrad’s office for the bank statement reconciliation would be Dr Conrad. He has immense knowledge about office management and holds the responsibility as the owner of the business to have control of every department that establishes the entire organization.